The evolution of shopping malls in India

It’s been more than a decade since organised retail came up in India. In the early phase of development, it was just restricted to plaza culture. Post 2003, mall culture started multiplying in the metro cities, and India started becoming the hub of organised retail. The modern Indian retail industry has gone through a plethora of changes to attain the stature that it has now. This article shows the way forward to establish successful retail and real estate synergies.

The organized retail trend started in India in 1999 with the launch of Ansal’s Plaza in Delhi, which was followed by Crossroads in Mumbai and Spencer Plaza in Chennai. Until the end of 2002, only three shopping malls existed in India. Post 2003, mall culture started multiplying in the metros. Cities like Mumbai, Bangalore, Kolkata, Chennai readily accepted the mall culture and so began a trend that was to catch on extremely fast.

The next half decade went well for the retail-real estate synergy. The year 2007-08 saw a huge growth rate in mall space all over the country.

The Recession of 2008

However, by the dusk of 2008, India was hit by recession which in-turn affected the retail sector as well. Mall culture witnessed a slowdown and mall mania became mall ordeal. The tide had turned for developers and retailers who had blindly jumped into the mall business without understanding the demographics and demand. From Gurgaon to Ahmedabad, consumers were walking out of malls.

However, every cloud has a silver lining. The downtrend taught Indian developers and retailers a lot. They started inputting more expert knowledge into the making of mall. They realized that the conceptualization of a shopping mall was not like building a residential or commercial tower and professional assistance became essential. Multiple ﬂoors, high vacancy rates, non-viable locations and poor commercialization were all done away with. The waters changed again and this time in favour of realtors and retailers.

The mall culture that was formed from 2011 onwards was something that India had never seen before. Retail-real estate synergy started witnessing an uptrend in metros from 2012 onwards.Consumer outlook towards the mall changed in 10 years – from just viewing it as an entertainment centre to seeing it as a complete shopping experience.

The E-Commerce Threat

With the advent of e-commerce in 2014, realtors again started anticipating a threat. Though they didn’t get cold feet, they did start strategizing – having learnt from past mistakes – thinking of more and more creative ways to retain spending customers.

Around this time when shopping malls were struggling to leave behind the lingering effects of the economic slowdown and survive the onslaught of e-commerce ﬁrms, Select CityWalk – Delhi, High Street Phoenix – Mumbai, and Express Avenue – Chennai were launched.

The winds changed direction once again and malls became all-the-rage. Today, Select CityWalk is clocking sales of Rs 2,750 per square foot per month, High Street Phoenix does about Rs 2,200 and Express Avenue, about Rs 1,400. A mall is considered to be performing good if its average sales is between Rs 900 –1,500 per square feet per month.

Mall Management

One of the factors that is critical to the success of malls is mall management. Malls must go that extra mile to cater to every need of their customers. Thus the need for managing malls eﬀectively and eﬃciently through SOPs (Standard Operating Procedures), is becoming the urgent need of the society and business as a whole.

Now, mall managers must strive for eﬀective operations and maintenance of the entire building, infrastructure; including the services and utilizes and ensure that they are used in a way that is consistent with the purpose for which they were built. Further, mall management also helps in ﬁnding the right kind of tenants, while leasing out space to tenants. Mall management has been identiﬁed as a critical factor for the success of malls and the retail industry across the world.

Another important factor to be considered is the mall layout and customer walk flow management. To be ahead in the race of attracting people and creating uniqueness, malls must focus on creating a layout which gives maximum visibility to retailers, providing them with ample display space, tactfully and technically using dead spaces, and creating focal points to attract customers.

As malls are turning to community centres, it becomes diﬃcult for mall managers to control the vast number of visitors. Malls simply can’t shut their doors after a certain number of people enter, saying we have enough crowd. Thus mall developers need to consider entertaining hundreds of people when designing a building.

Malls need to manage foot traffic and parking facilities as well. Foot traﬃc management involves crowd management inside the operational area of a mall. The ﬂow of people is related to the design of the mall and the spatial distribution of its tenants. For example, a star-shaped mall tends to have a problem of crowding in the centre of the mall, as everyone has to pass through the centre while moving from one side to the other. On the other hand, circular malls usually do not face the problem of traﬃc congestion because they tend to have better pedestrian ﬂow.

DLF, Mall of India, NOIDA

Managing parking facilities includes provision of ample parking and management of vehicles in the parking lot. Branding and advertising is one of the latest trends in retail mall retail estate that vacant spaces are being used for advertising displays to promote malls, its retailers and the retailers’ products. This can often be hi-tech, involving the use of digital displays, and draw the shopper’s attention to speciﬁc merchandise or promotions in a nearby store.